Financial Planning Business For Sale

Financial Planning Business For Sale-3
Their efforts to transition an entire book represent both a challenge and an opportunity confronting the industry today: Who gets the clients when advisors retire?BUYING OPPORTUNITYAbout one-third of all advisors will retire in the next 10 years, according to research firm Cerulli Associates.Younger advisors can find unparalleled opportunities in this demographic wave to grow their business by inheriting their elders' books."The problem is that, as you're going through the daily grind, you are not really looking around at aging advisors in your office," Garcia, 50, says.

Their efforts to transition an entire book represent both a challenge and an opportunity confronting the industry today: Who gets the clients when advisors retire?

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Inside a small sandwich shop about two years ago in Huntsville, Ala., Wade Sadler made up his mind about how he was going to retire.

The Raymond James advisor was having lunch with his colleague and friend Luis Garcia.

But setting a price and moving clients is no easy feat, say many advisors who have been through the process. Here's how older advisors are successfully exiting the business today, while their juniors keep it thriving.

LET'S MAKE A DEALA few firms do not allow their advisors to buy or sell books of business, choosing instead to offer incentives to retire in place while the firm parcels out their clients to other advisors.

For example, Raymond James introduced a revised program two years ago.

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Advisors at the firm now have two routes: They can agree on a one-time payment (Garcia and Sadler's choice) or stretch it out over several years, says Tom Walrond, COO of Raymond James & Associates' Private Client Group.Recruiter Mickey Wasserman notes that valuations may be higher in the independent space, up to 2.5 times trailing production, but he points to the difficulties of simply jumping ship to quickly sell and retire.Advisors making a move need to solidify their client base, which can take time, particularly if the assets are sticky, Wasserman says.Sadler, 67 at the time, told Garcia he was trying to figure out how to retire."I know a lot of people who work into their 70s.But you've got to know when you're ready," Sadler says.Another key factor: Do clients have unmet needs, such as estate planning?"That's where you look for revenue opportunities that haven't been uncovered, and the reason that they haven't is because the advisor maybe didn't have the opportunities or energy to do so," Thielke says."People make smart, wise decisions once they understand the issues," Walrond says.A few firms have also taken steps to encourage their advisors to recruit retiring advisors from outside firms."It's an acquisition strategy similar to what every corporation in America does, but you've got to get advisors to think that way," he adds.OPEN MARKETSSome industry insiders question whether employee advisors are being rewarded for the true value of their business."I would tell any wirehouse advisor looking to retire in the next two to five years to seriously consider going independent first, because those wirehouse offers are enormously tax inefficient," says John Threlkeld, an independent advisor affiliated with LPL Financial.


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